Amortization

58 For the purposes of sections 59 and 60, amortization means the gradual extinguishing of an amount included in account 30 (Transportation Plant), account 38 (Transportation Plant Leased to Others) or account 34 (Other Plant), by distributing such amount over a fixed period or over the estimated remaining life of the plant.

59 Where it is anticipated by a company that plant will be abandoned owing to the exhaustion of a particular source of traffic, obsolescence or any other cause, the company shall not change from depreciation accounting to amortization accounting without first obtaining the authorization of the Board.

(4) Any amount recovered from the insurance referred to in subsection (1), (2) or (3) shall be credited to the account or accounts originally debited with the related loss or expense.

(5) Where a company elects to create and maintain reserves for self-insurance, account 630-14 or account 730-14 (Insurance) shall be debited with estimated amounts in lieu of commercial insurance premiums, and account 72 (Insurance Appropriations) shall be credited with the estimated amounts.

(6) A schedule of risks covered by self-insurance shall be kept showing the character of risk and the rates used to compute the estimated amounts referred to in subsection (5).

(7) The rates referred to in subsection (6) shall not exceed commercial rates for the same protection.

(8) Where, as a result of an event or accident covered by self-insurance, costs are incurred of a type that would normally be debited to an expense account, such costs shall be debited to the insurance appropriations account and any excess of the expenditure over the applicable self-insurance shall be debited to the appropriate expense account.

(9) Where the self-insurance schedule referred to in subsection (6) covers the retirement of plant, the accounting for the retirement shall be as outlined in section 36 and the self-insurance applicable to the retired item shall be transferred from account 72 (Insurance Appropriations) to account 31 (Accumulated Depreciation — Transportation Plant) or to account 32 (Accumulated Amortization — Transportation Plant), as applicable.

(10) Where a company insures with a commercial insurance company any risks covered by self-insurance, the premiums for the insurance policy shall be debited to the insurance appropriations account and any recoveries under the policies shall be credited thereto.

Funds and Appropriations

62(1) Cash, securities or other assets set aside for a specific purpose shall be debited to account 22 (Sinking Funds), account 23 (Miscellaneous Special Funds), or account 3 (Special Deposits), as applicable, and the appropriate asset account shall be credited.

(2) Income from assets held in account 22 (Sinking Funds) and account 23 (Miscellaneous Special Funds) shall be credited to account 407 (Income from Sinking and Other Funds).

(3) Where a mortgage or any contractual obligation entered into by a company requires that income from assets held in a fund be added to that fund, the company shall make the necessary transfer to the fund account.

(4) Where a transfer referred to in subsection (3) is to account 23 (Miscellaneous Special Funds), and represents a company’s contribution to account 70 (Welfare and Pension Appropriations) or to account 72 (Insurance Appropriations), the company shall concurrently debit account 420 (Other Income Deductions) and credit account 70 or 72, as applicable, with the amount transferred.

(5) A company’s contribution to account 70 (Welfare and Pension Appropriations) or to account 72 (Insurance Appropriations) shall be provided by debits to expenses.

(6) Where the gain or loss on the sale of assets recorded in account 22 (Sinking Funds) or account 23 (Miscellaneous Special Funds) is material, the company shall inform the Board and shall transfer the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.

(7) Where the gain or loss on the sale of assets referred to in subsection (6) is not material, the company shall transfer the gain or loss to account 407 (Income from Sinking and Other Funds) or to account 420 (Other Income Deductions), as applicable.

SOR/86-999, s. 11.

Securities Owned

General

63(1) In this section and sections 64 to 68, cost means the amount of money paid by a company to acquire securities or, where the consideration paid for the securities is other than money, the money value of the consideration at the time the securities are acquired.

(2) A company shall record the cost of its investment in securities, excluding amounts paid for accrued interest and accrued dividends, in the appropriate accounts at the time of acquisition of the securities.

(4) Where securities having a fixed maturity date and recorded in account 2 (Temporary Cash Investments), account 20 (Investments in Affiliated Companies), account 21 (Other Investments), account 22 (Sinking Funds), or account 23 (Miscellaneous Special Funds) are purchased at a discount or premium, that discount or premium may be amortized over the remaining life of the securities by periodic debits or credits to the account in which the cost of the securities is recorded, with corresponding credits or debits to account 406 (Income from Investments), account 405 (Income from Affiliated Companies) or account 407 (Income from Sinking and Other Funds), as applicable, and if the amount to be amortized does not exceed $1,000, a company may write off the total discount or premium at one time.

(5) No amortization entries shall be recorded in respect of discounts on securities held as investments unless there is reason to believe that the securities will be disposed of at a sum equal to their par value, or that the par value will be collected at maturity.

SOR/86-999, s. 12.

Temporary Cash Investments

64(1) Where the gain or loss on the sale of assets recorded in account 2 (Temporary Cash Investments) is material, the company shall inform the Board and shall transfer the amount of the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.

(2) A gain or loss on a sale referred to in subsection (1) that is not material shall be transferred to account 406 (Income from Investments).

SOR/86-999, s. 13.

65(1) Where the amount required to provide for reductions in the market value of temporary cash investments is material, the company shall inform the Board and shall debit the amount required to account 422 (Extraordinary Income Deductions) and concurrently credit account 2 (Temporary Cash Investments).

(2) Where the amount required to provide for reductions in the market value of temporary cash investments is not material, it shall be debited to account 406 (Income from Investments) and concurrently credited to account 2 (Temporary Cash Investments).

SOR/86-999, s. 14.

Investments in Affiliated Companies and Other Investments

66(1) Where the gain or loss on the sale of assets recorded in account 20 (Investments in Affiliated Companies) or account 21 (Other Investments) is material, the company shall inform the Board and shall transfer the amount of the gain or loss to account 402 (Extraordinary Income) or to account 422 (Extraordinary Income Deductions), as applicable.

(2) A gain or loss on a sale referred to in subsection (1) that is not material shall be transferred to account 410 (Other Income) or to account 420 (Other Income Deductions), as applicable.

SOR/86-999, s. 15.

67(1) A company shall be governed by recognized accounting principles in reducing the value at which securities are recorded in account 20 (Investment in Affiliated Companies) or account 21 (Other Investments) to reflect anticipated loss in value.

(2) Permanent impairment of the value of securities referred to in subsection (1) shall be recorded in the accounts but fluctuations in market value shall not be recorded.

(3) Where a reduction in the value of securities referred to in subsection (1) is material, the company shall inform the Board and shall debit the amount of the reduction to account 422 (Extraordinary Income Deductions).

(4) Where a reduction in the value of securities referred to in subsection (1) is not material, the company shall debit the amount of the reduction to account 415 (Provision for Loss in Valuation of Investments).